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Facts
The assessee challenged four orders passed by the PCIT under Section 263 of the Income-tax Act for multiple assessment years. During the pendency of these appeals, financial creditors initiated Corporate Insolvency Resolution Process (CIRP) against the assessee under Section 7 of the IBC, which was admitted by the NCLT, imposing a moratorium under Section 14(1) of the IBC.
Held
The Tribunal held that, in light of the moratorium imposed by the NCLT under the IBC, all proceedings in any court or tribunal against the assessee cannot continue. Therefore, the appeals were dismissed for statistical purposes, with an option for the parties to seek revival if the NCLT order is reversed or modified.
Key Issues
Whether income tax appellate tribunal proceedings can continue against an assessee when a moratorium under the Insolvency and Bankruptcy Code, 2016, has been imposed by the NCLT.
Sections Cited
Section 263 of the Income-tax Act, 1961, Section 7 of the Insolvency and Bankruptcy Code, 2016, Section 14(1) of the Insolvency and Bankruptcy Code, 2016
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Income Tax Appellate Tribunal, DELHI BENCH: ‘H’ NEW DELHI
Before: SHRI SAKTIJIT DEY, VICE- & SHRI PRADIP KUMAR KEDIA
PER SAKTIJIT DEY, VICE-PRESIDENT
Captioned appeals have been filed by the assessee challenging four separate orders, all dated 24.03.2021, passed by learned Principle Commissioner of Income Tax (PCIT), Central, Delhi-3, under section 263 of the Income-tax Act, 1961 (in short ‘the Act’) for the assessment years 2014-15, 2015-16, 2016-17 and 2017-18.
When the appeals were called for hearing, none appeared on behalf of the assessee despite notice. Even, there is no application seeking adjournment.
In view of the aforesaid, we proceed to dispose of the appeals ex-parte qua the assessee after hearing learned Departmental Representative and based on the materials available on record. It is observed, certain financial creditors of the assessee company filed application under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the assessee before the National Company Law Tribunal (NCLT), since, the assessee had failed to repay the debt liability. Post filing of the present appeals, the NCLT principal bench, New Delhi, has passed an order on 17.05.2022 admitting the application of the financial creditors and initiating CIRP against the assessee. Further, upon admission of the application of the financial creditors, moratorium under section 14(1) of the IBC has been imposed. A copy of the aforesaid order of learned NCLT is available on record.
Thus, in view of the moratorium granted by NCLT, all proceedings in any court of law, Tribunal etc. cannot continue.
That being the position in law, no useful purpose is going to be served in keeping the appeals pending. Therefore, in our view, these appeals need to be consigned to the records.
In view of the aforesaid, we dismiss these appeals. However, opportunity is granted to the parties to seek revival of the appeals, in case, order of NCLT is either reversed or modified by any higher judicial Authority or if there is any change in factual or legal position or if it is necessary to do so in the interest of the parties.
In the result, appeals are dismissed for statistical purposes.
Order pronounced in the open court on 9th April, 2024